Breezy Explainer: Why Netflix might survive current Hollywood Actor and writer strikes

Breezy Explainer: Why Netflix might survive current Hollywood Actor and writer strikes

While Netflix is a member of the Alliance of Motion Picture and Television Producers (AMPTP), which has been the target of a strike by SAG-AFTRA (Screen Actors Guild – American Federation of Television and Radio Artists), a Reuters report suggests that the streaming giant is far better prepared to deal with it than other streamers and studios.

SAG-AFTRA launched the strike in response to an ongoing labor dispute with AMPTP, while the Writers Guild of America remains on strike. This strike, which centered on multiple related causes, began on May 2. So, already weakened by the residual effects of the Covid epidemic, the American entertainment business is now faced with a double strike by key unions. But, unlike Disney and Warner Bros. Discovery, Netflix is unlikely to have a significant economic influence.

A massive amount of content is on the way

According to Reuters, one of the reasons Netflix can withstand the negative impact of the inability of writers and actors is that it has a substantial supply of material for the time being. It can readily deploy pre-made content to seed its platform for months. Titles with diverse casts and well-known personalities, such as the action-thriller Heart of Stone, starring Gal Gadot, Alia Bhatt, and Jamie Dornan, will pique the interest of moviegoers all over the world. It may seem strange to see no US-based stars at premieres and media junkets.

International production capacities, global shows

As we all know, Netflix’s material is not limited to the United States or even the United Kingdom. South Korean shows, for example, are currently among the most popular. In recent years, the corporation has made significant investments in producing localized TV shows and movies for nations such as South Korea, Spain, India, and others. Money Heist from Spain and Squid Game from South Korea, for example, have become worldwide sensations. And, because actors outside the United States are not affected by the strike (they have no affiliation with SAG-AFTRA), Netflix can continue to produce content in other countries until the strike ends.

Just in time: The ban on password sharing pays off

We may despise it (I definitely do), but a crackdown on password sharing, one of the steps Netflix implemented to boost its subscriber base, appears to have worked, according to financial data. The company even witnessed an increase in new members after imposing higher fees on individuals who shared accounts outside of the same home. According to Antenna research, the crackdown led to four of the largest days of customer additions in the US in recent years. Experts believe that this change will result in nearly half of the 100 million families sharing passwords and eventually opening their own accounts, hence increasing the platform’s user base. This is, I must admit, quite stunning.

The rise of ad-supported content

The ad-supported tier, another tactic implemented by Netflix to stop subscriber losses and compete with rivals such as Disney+, HBO Max (now simply ‘Max,’ and Amazon Prime Video, has also been successful. It drew an increasing number of users ready to put up with commercials in exchange for lower membership fees. According to Reuters, many analysts anticipate that the crackdown on password sharing will encourage more users to subscribe to the $6.99 ad-supported tier, resulting in increased advertising revenue for the streamer.

So, what had been bothering Netflix?

We now know that Netflix has mostly recovered from the economic blows it took last year, which also resulted in hundreds of layoffs. But what brought it to the verge of failure? Netflix’s problems began when major film studios such as Disney and Warner Bros decided to jump on the streaming bandwagon with services such as Disney+ and Max, significantly eroding Netflix’s market share.

Unlike Netflix, these services arrived with decades of content, including millions of hours of well-loved and rewatchable TV episodes like Lizzie McGuire (in the case of Disney Plus) and Friends (in the case of Max). Indeed, Netflix was the first to stream much of the studio content before it became a competitor, which meant that many titles were no longer available on the streaming pioneer’s platform. As a result, Netflix had little choice but to create fresh material, and in an increasingly saturated market, it struggled to sell and promote its episodes and movies. However, it appears that its problems are over for the time being.

What is causing the WGA and SAG-AFTRA strikes in 2023?

The striking actors’ principal worries focus on two major issues: compensation and the rise of AI. Most actors rely heavily on residual payments from their many roles to achieve the minimum income threshold required to qualify for health insurance, which is currently $26,000 per year. Actors contend that the industry’s revenue should be dispersed in a way that benefits those on the outskirts. Actors are increasingly getting concerned about the expanding usage of AI, which is replacing human performances with digitally generated analogs. This tendency poses a substantial threat to acting job chances and raises concerns about the future of their careers. Most of the issues of writers are the same as those of actors, except they are in a far worse financial situation.

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